Payment Data Systems Reports 2013 Fiscal Year Results

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| Source: Payment Data Systems, Inc.

SAN ANTONIO, March 31, 2014 (GLOBE NEWSWIRE) -- Payment Data Systems (OTCBB:PYDS), an integrated electronic payments solutions provider, today announced the financial results for the year ended December 31, 2013.

Revenues for the fiscal year ended December 31, 2013 decreased to $5,180,362 from $7,345,974 for the year ended December 31, 2012. The decrease of $2,165,612 was primarily a result of lower transaction volumes across our ACH and prepaid card business segments.

Gross profit for the year ended December 31, 2013 decreased to $974,896 from $3,159,011 for the year ended December 31, 2012.

Cash and cash equivalents for the fiscal year ended December 31, 2013 increased to $26,573,771 from $3,759,791 for the year ended December 31, 2012. The increase was attributed to the dramatic increase in processing from newly acquired customers in the fourth quarter of 2013 that resulted in higher customer deposits. Operating income for the year ended December 31, 2013 decreased to a net loss of $755,432 from an operating gain of $1,390,988 for the year ended December 31, 2012.

Excluding the effect of non-cash expenses associated with stock-based compensation of $293,080 and depreciation expenses of $31,654, operating income for the year ended December 31, 2012 was net loss of $430,698.

While we generated income in the fourth quarter of 2013, our net loss for the year ended December 31, 2013 was $789,039 as compared to net income of $1,275,218 for the year ended December 31, 2012.

Other selling, general and administrative expenses decreased for the year ended December 31, 2013 to $1,405,594 from $1,509,333 for the year ended December 31, 2012.

Michael Long, Chief Executive Officer of Payment Data Systems said, "We were certainly not as pleased with the final results in 2013 as we were in 2012, but, in 2013, we saw continued growth in our credit and debit card transaction processing that increased twenty-three percent over 2012. Also, in 2013, we witnessed growth in our credit and debit card dollars processed that increased eighteen percent over 2012, resulting in record volumes for any year in the history of our Company. However, we experienced lower ACH transaction volumes and prepaid card volumes for 2013, which, ultimately, resulted in overall reduced revenue and income for the year."

Mr. Long continued, "In the last quarter of 2013, we initiated ACH transaction processing for newly acquired customers that led to dramatic increases in ACH transaction volumes. ACH volumes reported for fourth quarter of 2013 were the highest we have experienced in any previous quarter of 2013 and resulted in the highest revenues and income we experienced in any previous quarter for 2013. We believe these trends will continue for the foreseeable future. We also expect to see an increase in the number of our enrolled merchant customers, for whom we provide processing for credit and debit card transactions, and we expect to add new clients to our sales pipeline, which will create increased transaction volumes. We believe the profitability we experienced in the fourth quarter of 2013 will continue for the foreseeable future and that we will report record revenues for the first quarter of 2014. We believe we will also report dramatic increases in income as well. We will continue to position our company towards qualification for a national listing with NYSE MKT. Obtaining annual pre-tax income of greater than $750K is an important criteria that NYSE MKT requires. We believe that we are well positioned to exceed that income benchmark for 2014 if our current increases in processing volumes continue throughout the year. We believe the listing, if achieved, will bring greater liquidity in our stock and potentially allow for us to make industry related acquisitions which could lead to enhanced shareholder value."

Please review our annual report on Form 10K which will be filed today with the Securities and Exchange Commission for complete financials of the Company.

Financial Statements

PAYMENT DATA SYSTEMS, INC.
 
CONSOLIDATED BALANCE SHEETS
     
  December 31, December 31,
  2013 2012
ASSETS    
Cash and cash equivalents $26,573,771 $3,759,791
Accounts receivable, net 585,037 403,303
Prepaid expenses and other 98,966 114,699
Total current assets 27,257,774 4,277,793
Property and equipment, net 122,061 91,330
Other assets:    
Related party receivable -- 702,337
Marketable securities 27,450 31,467
Other assets 121,144 52,693
Total other assets 148,594 786,497
     
Total Assets $27,528,429 $5,155,620
     
LIABILITIES AND STOCKHOLDERS' EQUITY  
Current Liabilities:    
Accounts payable $60,818 $203,066
Accrued expenses 1,088,644 695,202
Customer deposits payable 25,740,163 2,115,122
Deferred revenue -- 3,875
Total current liabilities 26,889,625 3,017,265
     
Stockholders' Equity:    
Common stock, $0.001 par value, 200,000,000 shares authorized; 147,721,077 issued and 137,150,323 and 142,725,833 outstanding 147,721 147,721
Additional paid-in capital 56,873,423 56,873,423
     
Treasury stock, at cost; 10,570,754 and 4,995,244 shares (1,241,750) (238,158)
Deferred compensation (1,286,970) (1,580,050)
Accumulated deficit (53,853,620) (53,064,581)
Total stockholders' equity 638,804 2,138,355
     
Total Liabilities and Stockholders' Equity $27,528,429 $5,155,620
 
PAYMENT DATA SYSTEMS, INC.
     
CONSOLIDATED STATEMENTS OF OPERATIONS
     
  Year ended Year ended
  December 31, December 31,
  2013 2012
     
Revenues $5,180,362 $7,345,974
     
Operating expenses:    
Cost of services 4,205,466 4,186,963
Selling, general and administrative:    
Stock-based compensation 293,080 251,830
Other expenses 1,405,594 1,509,333
Depreciation 31,654 6,860
Total operating expenses 5,935,794 5,954,986
     
Operating income (loss) (755,432) 1,390,988
     
Other income (expense):    
Other income (expense) (1,350) (39,761)
Other income (expense), net (1,350) (39,761)
     
Income (loss) before income taxes (756,782) 1,351,227
Income taxes 32,257 76,009
     
Net Income (loss) $(789,039) $1,275,218
     
     
Earnings (loss) Per Share    
Basic and diluted earnings (loss) per common share: $(0.01) $0.01
Weighted average common shares outstanding    
Basic 126,117,526 133,050,998
Diluted 126,117,526 136,962,234

About Payment Data Systems, Inc.

Payment Data Systems is an integrated payment solutions provider to merchants and billers. The organization provides an extensive set of products to deliver world-class payment acceptance. Payment Data has solutions for merchants, billers, banks, service bureaus and card issuers. The strength of the company is its ability to offer specifically tailored solutions for card issuance, payment acceptance and bill payments.

For additional information, visit www.paymentdata.com. Contact Michael Long for Investor Relations information at 210.249.4040 or email at ir@paymentdata.com.

Website: http://www.paymentdata.com, www.ficentive.com, www.zbill.com

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Website: http://www.paymentdata.com, www.ficentive.com, www.zbill.com

FORWARD-LOOKING STATEMENTS DISCLAIMER:

Except for the historical information contained herein, the matters discussed in this release include certain forward-looking statements, which are intended to be covered by safe harbors. These statements include, but may not be limited to, all statements regarding our management's intent, belief and expectations, such as statements concerning our future and our operating and growth strategy. Investors are cautioned that all forward-looking statements involve risks and uncertainties including, without limitation, the factors detailed from time to time in our filings with the Securities and Exchange Commission. One or more of these factors have affected, and in the future could affect our businesses and financial results in the future and could cause actual results to differ materially from plans and projections. We believe that the assumptions underlying the forward-looking statements included in this release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved. All forward-looking statements made in this release are based on information presently available to our management. We assume no obligation to update any forward-looking statements, except as required by law.